Green Jobs Training Program Falls Short, Should Return Funds -- IG

Published: October 4, 2011

A $500 million green jobs program at the Department of Labor has so far provided only 15 percent of current participants with jobs, leading the agency's inspector general to recommend that the bulk of the money be returned to the Treasury.

The program, which was funded through the American Recovery and Reinvestment Act, aims to find employment for almost 80,000 people by providing grants for labor exchange and job training projects. With those grants expiring over the next 15 months, IG officials concluded that the program would fail to come close to that target.

More than $300 million remains unspent, according to the report (pdf). Sen. Chuck Grassley (R-Iowa), who requested the Labor audit when he was ranking member of the Senate Finance Committee, said the findings show that Congress should focus on creating jobs in all sectors of the economy.

"This report paints a pretty bleak picture of the program's effectiveness in job creation," he said in a statement. "It's hard to see how leaving $300 million in unused funding for the program in the hands of the Labor Department benefits either the taxpayers or the unemployed."

The report comes as the bankruptcy of solar manufacturer Solyndra has reinvigorated GOP criticism of the Obama administration's green jobs initiative. Congress is now investigating the Department of Energy's half-billion-dollar loan guarantee to the company, and the controversy has become a political issue (E&E Daily, Oct. 3, 2010).

According to the Labor IG report, as of June 30, grantees had placed 8,035 participants into jobs, or 10 percent of the program's target. Long-term unemployment numbers are worse, with 1,336 participants finding jobs for six months or longer. That's 2.5 percent of current participants, and 2 percent of the program's final target of 69,717.

Furthermore, "grantees have expressed concerns that jobs have not materialized and that job placements have been fewer than expected for this point in the grant program," according to the report.

"The rates at which grantees are achieving their performance goals have been increasing," IG officials wrote in the report. "However, with 61 percent of the training grant periods elapsed and only 10 percent of participants entered employment, there is no evidence that grantees will effectively use the funds and deliver targeted employment outcomes by the end of the grant periods."

Labor officials disagreed with the findings, citing the "initial lag" in the project's start-up phase. Assistant Secretary for Employment and Training Jane Oates said performance is expected to "significantly increase over time."

"[T]here is a 6 month lag between when an individual is reported as successfully completing the education/training program and obtaining employment, and when employment retention is reported," she wrote in a formal response to the report. As a result, she added, the IG report data only includes participants who entered employment as of Dec. 31, 2010.